Bitcoin Bulls Brace for Tariff Uncertainty Trap, Eye $120,000 Surge

NEW YORK, June 5, 2025 - Bitcoin's bullish momentum faces a significant hurdle as ongoing tariff uncertainties from U.S. President Donald Trump's policies could either stall its rally or propel it to new heights, according to market analysts. The cryptocurrency, which has surged 47.66% over the past year, is at a critical juncture as trade policy decisions continue to influence market sentiment.

Tariff Threats Cast Shadow Over Bitcoin

Swyftx lead analyst Pav Hundal warns that the primary threat to Bitcoin's bullish outlook is a prolonged period of uncertainty surrounding Trump's tariff proposals. If the U.S. administration persists with its tariff ultimatums without clear resolution over the next two months, Bitcoin could remain trapped in a volatile range.

This uncertainty stems from Trump's recent decision to impose 50% tariffs on foreign steel and aluminum, despite a May 28 ruling by the U.S. Court of International Trade that blocked earlier tariff attempts, citing overreach of authority. Hundal notes that such indecision could lead to a bearish correction, potentially pushing Bitcoin below the $100,000 mark, a level it struggled to maintain after dipping in early February.

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Macro Risks and Federal Reserve Caution

The Federal Reserve's decision on May 7 to maintain interest rates between 4.25% and 4.50% reflects caution amid rising inflation and unemployment risks. Hundal suggests that policymakers are awaiting concrete data on the economic impact of tariffs, which could delay monetary easing and risk a broader economic slowdown.

This hesitation could dampen enthusiasm for risk-on assets like Bitcoin, which thrives in environments of monetary stimulus and market optimism. The analyst highlights that the U.S. is at a macroeconomic crossroads, with the Federal Reserve navigating a delicate balance to achieve its 2% inflation target, now under threat from tariff-induced price pressures.

Did You Know?
Bitcoin's price volatility has historically been influenced by macroeconomic events, with trade policy decisions impacting its value by as much as 10% in a single week during past tariff announcements.

Potential for a Bitcoin Breakout

Despite the risks, a resolution to the tariff disputes could unlock significant upside for Bitcoin. Hundal predicts that an end to the "tariff saber rattling" could pave the way for Bitcoin to reach $120,000 as early as June. This optimism aligns with insights from Bitfinex analysts, who suggest that Bitcoin could climb above $115,000 in July if institutional buying persists and U.S. job data underperforms expectations.

A weaker jobs report could bolster expectations of Federal Reserve rate cuts, creating a favorable environment for cryptocurrencies. As of June 5, 2025, Bitcoin is trading at approximately $105,327, reflecting a 2.3% increase over the past week, according to CoinMarketCap data.